Apple executives were called in to testify before members of Congress yesterday. They were accused of “shifting” profits abroad to avoid paying taxes.
The fact of the matter, though, as Heritage Foundation tax expert Curtis Dubay told Fox Business yesterday, is that the money hasn’t been shifted at all because it wasn’t earned in the U.S. “I can’t go down to the Apple store here in Washington, buy an iPad, and have Apple then ‘shift’ that income abroad,” he said.
The U.S. corporate tax rate is the highest rate in the world. As long as it remains so exorbitant, successful businesses like Apple are going to keep their foreign income abroad.
Heritage’s Amy Payne has more:
The reason the Senate feigned indignation over an issue that had nothing to do with the U.S. is that some Members want Apple to pay more U.S. tax on all that foreign cash. They want Apple to bring all of that profit back into the U.S. and pay the U.S. corporate tax rate—the world’s highest—on it. But as long as we keep the U.S. rate the highest in the world, Apple and other multinational businesses are going to keep their foreign income abroad.
Apple has not done anything illegal by minimizing its tax liability. Because of America’s extremely high corporate tax rate, many companies don’t return to the U.S. what money they earn abroad. While other countries have been making efforts to cut their corporate tax rates, the U.S. has been making it more and more difficult for U.S. businesses.
Do you think Apple should pay more in taxes? Or should we fix the tax code to stop punishing successful firms?